Suminary 



Declining demand for live birds at the retail level, the movement of 

 proce8sing toward large-scale country plants, the advent of contract 

 growing, and dwindling niimljers of producers and small processors have 

 caused a substantial decline in numbers of live assemblers in recent 

 years and changes in the characteristics of the remaining firms. During 

 1951-57 the number of firms licensed by State departments of agricul- 

 ture to haul live poultry in New England declined 55 percent. The num- 

 ber of poultry trucks licensed declined 47 percent. 



The present assembly system in New England is a mixture of the old 

 and the new. The older system is characterized by decreasing operations 

 as numbers of small slaughterers, live-poultry stores, buyers of live 

 poultry, terminal market live-poultry receivers, and city dressing plants 

 dwindle. Newer types of firms, such as large piocessing plants, contract 

 haulers, and contractors, have made tremendous gains at the expense of 

 the older types and through extensive use of contract production. 



The size of the supply area for most firms has been shrinking. At the 

 same time volume per firm has increased. As farm unit sizes have in- 

 creased and the number of small firms has declined, itinerant live buy- 

 ing has virtually disappeared. Commercial meat chicken production now 

 greatly exceeds the volume of fowl in most areas. The increasing im- 

 portance of contract growing, particularly as firm size increases, has 

 contributed to producing larger lots and enabled better scheduling of 

 plant operations. 



The decline in the number of firms engaged in assembly, the changes 

 in the types of assembly firms and in their practices, and the dominance 

 of commercial meat chickens in total output have narrowed assembly 

 margins and reduced resources devoted to that function. Nevertheless, 

 the present assembly system is characterized by a sustantial excess of 

 capacity and by duplication of travel and expense. Possibilities exist for 

 further sizeable cost savings through enhanced firm and structural ef- 

 ficiencies. 



The individual firm can increase efficiency and lower costs per pound 

 in assembly by: (1) Capacity operation of a minimum number of trucks 

 and optimum pickup crew organization; (2) increasing total volume to 

 obtain any inherent economies of scale; and (3) increasing the volume 

 of poultry per mile of truck travel. As volume increases, from quite 

 small sizes, decreasing per pound costs result in part from the ability 

 of the firm to handle flocks of larger average size with the least-cost 

 combination of resources. 



On the basis of an analysis of cost data from 75 assemblers of live 

 poultry in New England, unit costs in assembly declined from 0.90 cent 

 per pound for one million pounds to 0.47 cent per pound at 50 million 

 pounds when poultry was available at the rate of 100 pounds per mile 

 of truck travel. Increasing the pounds per mile of truck travel to 1,000 

 lowered unit costs to 0.60 cent per pound for one million pounds and 

 0.35 cent per pound at 50 million pounds. 



Increased density in the supply area can be achieved by establish- 

 ment of exclusive supply areas for individual firms and/or a more active 



